New York-based Bluerock Real Estate has added to its apartment inventory in the lucrative ChampionsGate submarket, paying $59 million this week for Century ChampionsGate, a 304-unit, Class A community located adjacent to its namesake golf resort.
Chris Fiscelli, Bluerock’s director of investment research, told GrowthSpotter the firm continues to bank on Orlando’s strong economy and job growth, especially in the Four Corners area where it currently owns two other apartment communities. The sale price breaks down to $194,000 per unit.
Constructed in 2008, the community has a modern amenity package and 9-foot ceilings. Residents enjoy amenities including a resort style pool, outdoor grilling areas, state of the art fitness center, zen room with massage chair and Disney fireworks view. But it’s surrounded by new construction, such as Bluerock’s The Gate apartments in downtown ChampionsGate and ChampionsVue, right next door.
“This property in particular is a bit of a value-add property,” Fiscelli said. “We’re going to put some value improvements in and bring rents up.”
He said the amenities and grounds were in good shape with lush, mature landscaping, but the unit interiors need to be brought up to today’s standards. Bluerock will gradually renovate the complex as units turn over the next three years.
Newmark Knight Frank Senior Managing Director Scott Ramey and Executive Managing Director Kevin Judd represented the seller, Centennial Holding Company. The asset appreciated by $18 million since Centennial purchased it in 2015.
“This submarket is one of the best growth stories that you’ll find in Orlando," Ramey said. "When we sold the property four years ago, the community was the newest property in the submarket. Now, as a function of the tremendous population and job growth that has come into this submarket, there have been new apartment projects that have delivered which have helped to elevate the overall market and give the next owner a significant amount of upside moving forward.”
About a dozen new luxury apartment communities are under construction or in the pipeline in the ChampionsGate-Reunion submarket by such market leaders as Encore Capital, DeBartolo Development, RIDA, Sovereign Properties and Watermark Residential.
“The entire ChampionsGate area is exploding with growth, heavily driven by the booming tourist industry as well as a growing logistics and medical presence," Judd said. "Because of the high quality of construction and recent upgrades that were completed by the current owner, the property is ideally positioned to benefit from all of the surrounding growth for the foreseeable future.”
Bluerock sourced a $5.15 million loan from Keybank National, and the firm assumed the balance of Centennial’s $33.5 million loan from BB&T.
Fiscelli said the purchasing entity, BR Meadows DST, is a trust is designed to sell shares to individual investors who are looking to place funds in a 1031 Exchange. The minimum investment is $100,000.